lake county real estate. and then some...

mom and i sold houses together for over 22 years, until she retired in 2015. i have kept on selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :) www.tkmomteam.com

Wednesday, February 6, 2019

One More Time… You Do Not Need 20% Down to Buy a Home

The largest obstacle renters face when planning to buy a home is
saving for a down payment. This challenge is amplified by rising rents,
which has eaten into the amount of money renters have leftover for
savings each month after paying expenses.
In combination with higher rents, survey after survey has shown that
non-homeowners (renters and those living rent-free with family or
friends) believe they need to save upwards of 20% for their down
payment!
According to the “Barriers to Accessing Homeownership” study commissioned in partnership between the Urban Institute, Down Payment Resource, and Freddie Mac,39% of non-homeowners and 30% of those who already own a home believe they need more than a 20% down payment.
The percentage of those who are aware of low down payment programs
(those under 5%) is surprisingly low at 12% for non-homeowners and 13%
for homeowners.
In a recent Convergys Analytics report, they found that 49% of renters believe they need at least a 20% down payment.The median down payment on loans approved in 2018 was only 5%! Those waiting until they have over 20% may already have enough saved to buy now!
There are over 45 million millennials (33%) who are mortgage ready
right now, meaning their income, debt, and credit scores would all allow
them to qualify for a mortgage today!

Bottom Line

If your five-year plan includes buying a home, let’s get together to
determine what it will take to make that plan a reality. You may be
closer to your dream than you realize!

Monday, December 3, 2018

Homebuyers Willing to Sacrifice ‘Must-Haves’ in Favor of Good School Districts

It should come as no surprise that buying a home in a good school district is important to homebuyers. According to a report from Realtor.com,
86% of 18-34 year-olds and 84% of those aged 35-54 indicated that their
home search areas were defined by school district boundaries.
What is surprising, however, is that 78% of recent homebuyers sacrificed features from their “must-have” lists in order to find homes within their dream school districts.
The top feature sacrificed was a garage at 19%, followed closely by a
large backyard, an updated kitchen, the desired number of bedrooms, and
an outdoor living area. The full results are shown in the graph below.

Buyers are attracted to schools with high test scores, accelerated
academic programs, art and music programs, diversity, and before and
after-school programs.
With a limited number of homes available to buy in today’s real
estate market, competition is fierce for homes in good school districts.
Danielle Hale, Chief Economist for Realtor.com, explained further,

“Most buyers understand that they may not be able to
find a home that covers every single item on their wish list, but our
survey shows that school districts are an area where many buyers aren’t
willing to compromise.For many buyers and not just buyers with children, ‘location, location, location,’ means ‘schools, schools, schools.’” (emphasis added)

Bottom Line

For buyers across the country, the quality of their children’s (or
future children’s) education ranks highest on their must-have lists.
Before you start the search for your next home, let’s get together to
discuss the market conditions in our area.

Sunday, December 2, 2018

Top 3 Myths About Today’s Real Estate Market

There are many conflicting headlines when it comes to describing
today’s real estate market. Some are making comparisons to the market we
experienced 10 years ago and are starting to believe that we may be
doomed to repeat ourselves. Others are just plain wrong when it comes to
what it takes to qualify for a mortgage.
Today, we want to try and clear the air by shedding some light on
what’s causing some of these headlines, as well as what’s truly going
on.

Myth #1: We Are Headed for Another Housing Bubble

Home prices have appreciated year-over-year for the last 76 straight months.
Many areas of the country are at or near their peak prices achieved
before the last housing bubble burst. This has many worried that we are
headed towards another housing bubble.Reality: The biggest challenge facing today’s real estate market is a lack of homes for sale! Demand is strong, as many renters have come off the fence and are searching for their dream homes.
Historically, a normal market requires a 6-month supply of inventory
in order for prices to rise with the rate of inflation. According to the
National Association of Realtors (NAR) there is currently a 4.3-month supply of inventory.The US housing market hasn’t had 6-months inventory since August 2012! The concept of supply and demand is what is driving home prices up!

Myth #2: The Rumored Recession Will Lead to Another Housing Market Crash

Economists and analysts know that the country has experienced
economic growth for almost a decade. When this happens, they also know
that a recession can’t be too far off. But what is a recession?Merriam-Webster defines a recession as “a period of
temporary economic decline during which trade and industrial activity
are reduced, generally identified by a fall in GDP in two consecutive
quarters.”Reality: Recession DOES NOT equal housing crisis.
Many people associate these two terms with one another because the last
time we had a recession it was caused by a housing crisis. According to
the Federal Reserve, over the last 40 years, there have been six recessions. In each of the previous five recessions, home values appreciated.

Myth #3: There is an Affordability Crisis Looming

Rising home prices have many concerned that the average family will
no longer be able to afford the most precious piece of the American
Dream – their own home.
There are many different affordability indexes supported by different
organizations that all measure different data. For this reason, there
is a lot of confusion about what “affordable” actually means.
The monthly cost of a home is determined by the home’s price and the
interest rate on the mortgage used to purchase it. According to Freddie Mac, interest rates have risen from 3.95% in January to 4.59% just last week.Reality: As we mentioned earlier, home prices have
appreciated year-over-year for the last 76 months, largely driven by
high demand and low supply.
According to a recent study by Zillow, the percentage of median income
necessary to buy a home in today’s market (17.1%) is well below the
mark reached in 1985 – 2000 (21%), as well as the mark reached in 2006
(25.4)! Interest rates would have to increase to 6% before buying a home
would be less affordable than historical norms.
The starter-home market has appreciated at higher levels (9.4%
year-over-year) than any other market. One reason for this is the fact
that many of the first-time buyers who have flocked to the starter-home
market are being met with high competition. For some hopeful buyers, it
may take more than a good offer to stand out from the crowd!

Bottom Line

There is a lot of confusion in today’s real estate market. If your
future plans include buying or selling, make sure you have a trusted
advisor and market expert by your side to help guide you to the best
decision for you and your family.

Friday, November 30, 2018

How Long Do Most Families Live in a House?

The National Association of Realtors (NAR) keeps
historical data on many aspects of homeownership. One of their data
points, which has changed dramatically, is the median tenure of a family
in a home, meaning how long a family stays in a home prior to moving.
As the graph below shows, over the last twenty years (1985-2008), the median tenure averaged exactly six years. However, since 2014, that average is almost ten years – an increase of almost 50%.

Why the dramatic increase?

The reasons for this change are plentiful!
The fall in home prices during the housing crisis left many
homeowners in a negative equity situation (where their home was worth
less than the mortgage on the property). Also, the uncertainty of the
economy made some homeowners much more fiscally conservative about
making a move.
With home prices rising dramatically over the last several years, 95.3% of homes with a mortgage are now in a positive equity situation, according to CoreLogic.
With the economy coming back and wages starting to increase, many
homeowners are in a much better financial situation than they were just a
few short years ago.
One other reason for the increase was brought to light by NAR in their 2018 Home Buyer and Seller Generational Trends Report. According to the report,

“Sellers 37 years and younger stayed in their home for six years…”

These homeowners, who are either looking for more space to
accommodate their growing families or for better school districts to do
the same, are likely to move more often (compared to typical sellers who stayed in their homes for 10 years). The
homeownership rate among young families, however, has still not caught
up to previous generations, resulting in the jump we have seen in median
tenure!

What does this mean for housing?

Many believe that a large portion of homeowners are not in a house
that is best for their current family circumstance; they could be baby
boomers living in an empty, four-bedroom colonial, or a millennial
couple living in a one-bedroom condo planning to start a family.
These homeowners are ready to make a move, and since a lack of
housing inventory is still a major challenge in the current housing
market, this could be great news.

“Rents increased month-over-month in 62 of the
nation’s 100 largest cities, down significantly from the 85 cities that
saw rents rise last month. That said, rents are still up
year-over-year in most of the nation’s largest markets — 77 of the 100
largest cities have seen rents increase over the past twelve months.”

“Currently, nearly half (47 percent) of renter households are cost burdened (i.e., paying more than 30 percent of income for housing), while 25 percent (totaling 11 million households) are severely cost burdened, paying over 50 percent of their total household income for rent.”

These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.

It’s Cheaper to Buy Than Rent

As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 2% less
expensive in Honolulu (HI), all the way up to 48.9% less expensive in
Detroit (MI), and 26.3% nationwide!

Know Your Options

Perhaps you have already saved enough to buy your first home. A nationwide survey of about 1,166 renters found that 34% said they rent because they cannot afford to buy, 29% said they cannot afford to buy where they live, and nearly a quarter (24%) were saving to buy.
Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before,
in many areas of the country, a first-time homebuyer can save for a 3%
down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap that so many renters are currently in.
If you are ready and willing to buy a home, find out if you are able.
Let’s get together to determine if you can qualify for a mortgage today!

Tuesday, November 27, 2018

Why are Existing Home Sales Down?

The latest Existing Home Sales Report issued by the National Association of Realtors
(NAR) revealed that home sales have decreased for four consecutive
months and are at their slowest pace in over two years. This has some
industry leaders puzzled considering the fact that the economy is
strengthening, unemployment is down, and wages are beginning to rise.
This begs the question: “Where are the buyers?”
Actually, agents in the field of most communities are still seeing
strong desire from prospective purchasers. They have a list of potential
buyers ready to go if the right houses come on the market and they
claim it is not a shortage of demand, but is instead a shortage of
inventory that is causing the market to soften.

Why is there a shortage of inventory?

You only need to look at the graph below to understand:

New construction sales over the last ten years are far below historic numbers from 1995-2002.
A recent industry report looked at building permits and concluded:

“If construction over the past decade matched
historic norms, accounting for population change, the country would have
had 2.3 million more single-family home permits.”

That decade of not building enough homes is the primary reason for the concerns about today’s market.

Wait, weren’t we talking about ‘existing’ home sales?

Some may argue that NAR’s sales report deals with existing home sales
and not new construction, and they would be correct. However, reports
have shown that one of the main reasons why existing homeowners are not
selling is because they can’t find homes that meet the needs of their
current lifestyles. Historically, the upgrades in a newly constructed
home were the answers to those needs.
Over the last decade, however, there were fewer homes built to
satisfy this move-up seller. Consequently, there are many homeowners who
stayed in their homes for a longer tenure, instead of putting their homes up for sale.

Bottom Line

As more new homes are being built, there will be more housing
inventory to satisfy current demand which will cause prices to moderate
and sales volumes to increase.

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About Me

i am a mom. and a wife. and a realtor. when i grow up i want to spend all day taking pictures and then spend all night looking at them. in the meantime, i am going to keep selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :)